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Energy benchmarking growing trend in energy policy

April 6, 2017

Lucid is in the business of driving building efficiency and savings through the intelligent use of data. As we’ve worked with hundreds of companies and thousands of buildings, one thing that we’ve observed is that those building managers who regularly benchmark their buildings’ performance are more successful in meeting their goals. To that end, we’ve partnered with the Department of Energy (DOE), to develop a free, easy to use benchmarking tool called Benchmark My Building. This blog outlines the benefits of benchmarking as a practice, and the policies that are increasingly in place with regard to benchmarking commercial buildings.

Commercial Benchmarking Trends

A growing trend in energy conservation and efficiency policy is to incorporate benchmarking and disclosure requirements for commercial buildings. In 2008, Washington D.C. became the first U.S. city to impose benchmarking requirements on commercial buildings. Two states, one county, and 23 U.S. cities have followed suit and now require some form of benchmarking for commercial buildings. Salt Lake City and Reno may soon join the list.

As these requirements begin to impact how buildings are sold, operated and managed, it is imperative to understand what benchmarking is, why it is gaining traction, and the advantages awaiting those who embrace it. Over the coming weeks, we will discuss the “nuts and bolts” of benchmarking policies, whether these policies are effective, and how proactively leveraging building and metering systems data can reduce emissions and drive energy savings.

Benchmarking Deconstructed

As a management practice, benchmarking involves tracking building performance by regularly measuring key performance indicators such as energy use, periods of peak and light demand, energy use compared to building use, and spikes in energy use. Benchmarking then compares current performance against past performance; or to that of other similar buildings. Benchmarking policies are not a new practice. Instead, they recognize the age-old truth that what gets measured gets managed, and accordingly mandate tracking and reporting. Experience shows that where benchmarking regulations have been implemented, building owners, managers and occupants better understand how their building(s) are performing. In turn, they are more likely to adopt behavioral and operational changes that improve performance. Effective benchmarking helps to identify savings opportunities, prioritize efficiency investments and verify savings from those investments.

Most commercial benchmarking requirements are measured by square footage. If an existing structure is equal to or greater than the stated square footage, disclosure of certain performance indicators such as energy use intensity (EUI) is required. All cities and states currently use Energy Star Portfolio Manager as a reporting tool, and nearly all include a transparency component. Typically, benchmarking regulations are rolled out over the course of multiple years. First, regulations require compliance from larger buildings, while progressively requiring compliance from smaller ones. In the following chart, we indicate this trend for cities with benchmarking requirements in the U.S.

Benchmarking Requirements by Location

Why Energy Benchmarking is Gaining Traction

In the United States, buildings account for nearly 75 percent of electricity consumed. With a majority of electricity produced by burning fossil fuels, it is little wonder that roughly 50 percent of CO2 emissions are attributed to building operations. When you factor in the fact that the EPA estimates that 30 percent of electricity consumption is inefficient or unnecessary, it is easy to understand why benchmarking policies are gaining traction.

It is estimated that the U.S. alone could save $327 billion per year in energy costs if energy productivity is doubled by 2030. Thus, the objectives of benchmarking regulations are most commonly stated in terms of emission reductions or correlative energy use reductions. Saving money, creating economic growth, and improving air quality are additional objectives of many energy benchmarking policies.

Ultimately, the idea behind energy benchmarking is simple. Once gathered, benchmarking data can be used to establish a building’s baseline energy performance. From there, building owners and managers can set performance goals and use insights from building and metering systems data to track and improve energy usage and to prioritize efficiency investments. The true value of benchmarking does not stop with emissions and energy reductions. Improved building performance is additionally related to increased worker productivity, higher quality tenants and rents, lower risk to investors, and improved occupant health.

Optimizing Results From Benchmarking

To date, all benchmarking regulations use Energy Star Portfolio Manager (ESPM) as their designated energy data reporting tool. ESPM uses the reported data, accounting for differences in climate, occupancy and operating hours, to calculate an Energy Star Score. The scores range from 1-100 with 50 representing median energy performance. A recent EPA study of over 35,000 properties participating in the Energy Star Program found that the practice of benchmarking results in an average annual energy savings of 2.4 percent. While this represents huge savings in operational costs, could the results be even better?

The answer to that question will vary case by case, but largely depends on the granularity of the data available and the efficiency with which data is aggregated, analyzed and reported. The more automated the process, the less time and money is spent on compliance. The more data points collected, the more insights building management will have in order to proactively optimize performance.

To further understand your buildings’ current energy use, visit www.benchmarkmybuilding.com.